<b>XIII LOK SABHA DEBATES, <i> Session II (Winter Session) </i> </b>
XIII LOK SABHA DEBATES, Session II (Winter Session) Tuesday, December 21, 1999/Agrahayana 29, 1921 (Saka )

Type of Debate: CALLING ATTENTION (RULE-197)
Title: Situation arising out of crisis in Jute Industry and NJMC and steps taken by the Government in this regard.

14.05 hours

MR. CHAIRMAN: Now, the House shall take up item no. 14 of the List of Business -- Calling Attention.

Shri Rup Chand Pal.

... (Interruptions)

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SHRI RUPCHAND PAL (HOOGLY): Sir, I call the attention of the Minister of Textiles to the following matter of urgent public importance and request that he may make a statement thereon:

"The situation arising out of crisis in Jute Industry and NJMC and steps taken by the Government in regard thereto."

1407 hrs.

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SHRI RUPCHAND PAL (HOOGLY): Mr. Chairman, Sir, in the statement, the hon. Minister, at the end, has made some tall promises about the steps the Government propose to take for the revival of a very traditional industry.

Although it is concentrated mostly in the eastern part of India, particularly West Bengal, the problem is currently being faced by different areas of raw jute production. The problem is of assuring a minimum support price for the cultivators who are mostly small and marginal farmers.

A large number of jute mills have already been referred to the BIFR. One of them is the NJMC group, which has six mills which have been referred to the BIFR. It has a potential not only to cater to the domestic needs but also to give a fillip to our export activities. It is under reference to the BIFR. A large chunk of badli workers who are working there for seven years now are deprived of their livelihood. It is still said that the Government is taking steps like encouraging modernization of jute ills and so on. I shall come to the various parts of the statement later on. My colleagues will also ask several questions.

What is the role of the Jute Corporation of India which is supposed to protect the interest of the cultivators? Has it had the required funds for the purchase of jute from different centres to ensure a minimum support price? No. The Government owes to the JCI, as on the 30th March, 1998, more than Rs.70 crore. With regard to JCMC, after the fibre value and interest thereon, the Government owes Rs.222 crore. The current dues of the Government to NJMC for the supply of raw jute is about Rs.60.50 crore. With such a backlog of dues from the Government, which had set up these bodies to ensure a minimum support price to the cultivators, how can they operate?

There is no fund available. The low capital base of JCI was Rs.5 crore only. The TD5 base at that time was 182.50 per quintal and now it is about 750 per quintal. The capital base should be raised. Nothing has been said about raising the capital base of JCI. It is said in the statement of the Minister that:

"JCI undertook price support operation in a few pockets for very short periods of time.

I would like the Minister to tell the House as to how many pockets and for what period the JCI had been operating. Is it not true that they had been employing the private operators to purchase raw jute from the cultivators and the cultivators who had come had been making distress sales? They were never protected by the JCI, although the JCI never had that intention to do so. But there was lack of funds and there was no infrastructure; over the years several centres had been closed down also. The private operators were encouraged to do the job who are virtually looting the cultivators instead of protecting their interests. This is not covered in the statement. The Minister owes an explanation to this House. This is first one.

Secondly, let us take the mandatory packaging provisions which are covered by 1987 Act. Over the years, it seems that it has turned into a farce. It is more flouted than complied with. Earlier, they had done it in respect of cement. Then, it was in respect of fertilizer. It is being said that they want to do it now in the case of fertilizer sector to the required extent. What is the required extent? The mandatory jute packaging provisions are never complied with. In a big way, they are evading the order rather than obeying the order.

Thirdly, let us take the case of sugar. The powerful sugar lobby is exerting pressure and they are saying that 20 per cent concession from the mandatory provision should be given. In the meanwhile, some bureaucrats who are hand in glove with them are operating to take away sugar from the mandatory packaging provisions.

These days, the world over there is a new perception to go in for eco-friendly packaging materials. One of the best materials for such eco-friendly packaging is jute fibre. Over the years we had a good market abroad and we had a good domestic market also. Now, we find that Bangladesh is outstripping us in the matter of price, in the matter of several diversified products; Indian jute products are receding from the global market, on the other hand, the mandatory jute packaging provisions are being diluted over the years, even by the Government and they are encouraging this lobby. The powerful synthetic fibre lobbies and others want to kill this industry. It is not a sunset industry; this could rather be called as a sunrise industry in this new age of environmental concept that is going on in the world over.

It has a great potential, but the whole potential is being disturbed and destroyed in a planned way, by a handful of people and this Government is supporting them instead of supporting this industry.

There is one very good organisation called IJIRA. They are responsible for R&D activities. Firstly, the result of their researches are never made available to the people who needed. Secondly, the bureaucracy at the higher level is controlling the whole thing; instead of honouring the people involved in the whole scheme of things, they humiliate them. They are being thrown out of jobs, they are being threatened. There is an autocratic management.

Now, it seems that they are out to privatise this organisation. Several indications are available to the effect that there are people who are out to privatise it. Earlier, when it was part of the CSIR, scientists were working well. Ultimately, when it was delinked from the CSIR, gradually, during the Congress regime as well as during this Government's regime, the research and development activities of this excellent organisation have been diluted. In the last para of the statement, an assurance has been given that the Government is engaged in reviving this industry. It is not so. The hon. Minister owes an explanation why they are not taking adequate steps for improving the R&D unit which is called IJIRA for reviving this organisation. The Government of West Bengal had come out with a Memorandum. An All Party delegation has come today to meet the hon. Minister. I think the hon. Minister is going to meet that delegation. That delegation has five things to say. The first point is regarding availability of funds to the JCI. They say that the Government should make available enough funds for the JCI so that they can ensure minimum support price to the cultivators. The second point is regarding the working capital. They have suggested that it could be raised to Rs. 100 crore. The third point is regarding dues payable to JCI. The Union Government should immediately pay back all the dues to JCI. The JCI should be entrusted to supply the entire raw jute requirement of NJMC and other industries. The privatisation of Purchasing Centre of JCI by engaging private operators should be stopped forthwith.

I, along with several other colleagues, met the Prime Minister several times on this issue. Due to behind the scene pressures of synthetic fibre lobby, this industry which has huge potential to grow, is not allowed to grow and flourish. Instead, it is being limited and confined. It is because of the negative steps taken by the Government this industry is declining in every State. Why the jute cultivation is going down over the years? It is because it is not remunerative. People know that if they involve themselves in cultivating this cash crop, they would be losing money. So, they are switching over to other crops.

So, my plea to the Government and my request to the hon. Minister is that they should come out with a comprehensive plan of action. I understand that some business bodies have come out with some action plan mentioning the potentials of this industry. They had focussed their attention on the areas which need to be taken care of, like marketing and diversification. Several suggestions have come. I understand that the Government has to regulate the international jute bodies by the year 2000. Every care should be taken to see that we are not isolated. It is because several competitors are coming. Thailand, Vietnam and China are coming in a big way. Many of us have seen how Bangladesh is flourishing in this industry. Of course, UNDP is there for us. But we are not able to use it properly for diversification.

I would like to mention one or two more points. One is about the Lagan jute machineries.

They do have good market not only in our country but abroad also. I think Dr. Sengupta knows it pretty well. It is a good market, but because of lack of proper coordination, cooperation and help from the Central Government they cannot go forward or even operate. In the given circumstances, they are being put into great disadvantage. My plea is that the research organisation by the name IJIRA, which is already there, should be properly patronised. It should be seen that the Scientists do not feel humiliated. The autocratic step that has been taken should be withdrawn. They have tried to meet the hon. Minister a number of times. I can take some of them with me and they can meet the hon. Minister so that he can listen to them. The Government should assure the House about JCI and NJMC. The Government should not only assure the House about the workers who are deprived of their salaries but also about packaging. They are demanding 20 per cent concession on sugar. Alongwith a number of trade union leaders, we have already met the Prime Minister. Lastly, for the overall development of this sector of industry having great potentials, the Government should come out with a comprehensive policy.

THE MINISTER OF TEXTILES (SHRI KASHIRAM RANA): Mr. Chairman, Sir, while the production of jute this year has been lower compared to last year, because of sufficient carry over stock of last year, there has been no shortage of raw jute in the market. The farmers have been getting prices above the Minimum Support Price for most periods of this year even though the Minimum Support Price for jute was increased this year by Rs. 100 per quintal, as compared to last year and fixed at Rs. 750 per quintal for TD5 for the jute year 1999-2000.

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SHRI KASHIRAM RANA: Sir, JCI undertook price support operation in a few pockets for very short periods of time during the current year since raw jute prices were mostly prevailing over the MSP.

The Jute Mills in the country have been geared up to meet the packaging requirements of the foodgrains and sugar sectors fully and the fertilizer sector to the required extent.

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SHRI KASHIRAM RANA: Sir, there is adequate installed capacity and production capability to meet these requirements.

In the mill sector, out of the 73 jute mills in the country, two jute mills lying closed for over 12 years. Out of the balance, 34 mills are sick and stand referred to BIFR, and four mills are incorporated outside this country. The mills other than the closed ones are operational and have produced jute goods during the current year.

The National Jute Manufacturers Corporation Limited has, under it, six jute mills namely, (i) National, (ii) Alexandra, (iii), Khardah, (iv) Kinnision, (v) RBHM, and (vi) Union.

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SHRI KASHIRAM RANA: These mills were mostly sick mills taken over under the Industries (Development and Regulation) Act, 1951 and subsewquently nationalised. NJMC has been declared sick under the Sick Industrial Companies (Special Provisions) Act, 1985 by the BIFR. BIFR has appointed Industrial Investment Bank of India as the Operating Agency to prepare a revised turn around plan.

Government have been giving financial support to NJMC to meet the shortfall in salary/wages since take over. In addition, funds for Voluntary Retirement Scheme have also been provided. During the year 1999-2000, a sum of Rs.50 crore have already been released. NJMC produces, on an average, 80,000 tonnes of jute goods every year which is about five per cent to six per cent of the total jute goods produced in the country. It is a fact that NJMC mills had to temporarily stop manufacturing activities due to shortage of working capital and raw jute in their stock. Efforts are being made to restart production in these mills immediately by tying up necessary working capital/buy back arrangements with organizations like the State Trading Corporation.

14.16 hours (Dr. Raghuvansh Prasad Singh in the Chair)

The Government have been taking measures aimed at improving the productivity and quality of raw jute, encouraging modernization of jute mills, as also development of value added diversified jute products including in the decentralized sector to promote new and diversified uses of the fibre.

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